Budget 2023: Chris Hipkins lays out what to expect, but Christopher Luxon's sceptical

The Prime Minister's given the strongest hint yet that this year's Budget will be a sober one.

He's calling it the "no-frills" Budget because it reflects the times the country's going through.

There'll be two main focuses: the cost of living and cyclone recovery, the two biggest immediate issues.

For the first time, an official estimate of the cost of recovery from the cyclones has been put at between $9 billion and $14 billion.

Chris Hipkins was at pains to make it clear there'll be no new taxes like a wealth tax or a capital gains tax in this Budget. 

But he did say there will be investment in the infrastructure for skills and science.

After quite a fancy lunch of beef, chicken salad and out-of-season asparagus, the Prime Minister told Kiwis to think of him as home brand Chippy.

"This will be a no-frills Budget. It befits the times that we are currently living in. It will be about getting the basics right."

He used his pre-Budget speech to swear he's a sensible spender.

"It's not right for households to be tightening their belts if the Government isn't also being seen to be doing the same," Hipkins said.

But National leader Christopher Luxon said he's "very sceptical of their ability to be able to do that".

Hipkins said: "Living within our means is an important economic goal for me and for the Government".

Professionally, Hipkins has quite a bit to pay for. The cost of the devastating Auckland floods and Cyclone Gabrielle could be up to $14.5 billion.

"That is more than the Kaikōura earthquake but significantly less than the Canterbury earthquake."

It would be paid for by borrowing more and spending less - no frills and no taxes.

"There will be no new taxes or levies to pay for the recovery," Hipkins said.

No new taxes at all - well this term at least.

That's even after the Revenue Minister set the cat amongst the rich on Wednesday with Inland Revenue's investigation finding the uber-wealthy pay about half the equivalent tax of everyday Kiwis.

The Prime Minister ruled out any new taxes before the election, then ruled them out again and again.

"The Government will not be introducing any major new taxes like a wealth tax or a capital gains tax in this Budget... we won't be rocking the boat by introducing major new taxes... I have made that absolutely clear today."

But he left the door open for campaigning on new ones or even adjusting tax brackets.

"Now is not the right time to do that when we have a high inflationary environment."

A high inflationary environment which he said was on its way down, partly thanks to what is now skyrocketing immigration.

"You asked the Government to take steps to attract more labour to New Zealand - and we have. And those actions are starting to work," Hipkins said. 

New Zealand could be on track for 100,000 migrant arrivals in one year, which would be the highest-ever net migration.

"We haven't planned for this level of migration," said Infometrics chief executive and principal economist Brad Olsen. 

"We know we've got housing challenges, we know we've got infrastructure shortages. All of that is going to be even further exasperated."

The Prime Minister said we're "catching up". 

"There's been a house-building boom in recent years. That doesn't mean we're out of the woods yet though so we've got to make sure we get the balance right."

Getting the balance right, the unofficial slogan the Prime Minister has hung on Budget 2023.

Amelia Wade Analysis 

So was that speech just a bit boring?

It was a bit - and that's exactly the point.

This speech was timed to be the day after the tax investigation so the Prime Minister could smother rumours of a stealth wealth tax.

Labour has a lot of scar tissue from capital gains tax attacks and the last thing the Government wants to be doing is having that conversation when a block of cheddar is nudging on $20.

Up until now, Chris Hipkins has been defined by what he's scrapped rather than what he stands for. The Budget is his chance to change that and he's made it clear his priorities will be skills, science and infrastructure.

Though he's not quite done with the scrap heap yet. The final part in the policy bonfire trilogy will be released on Budget day, in 21 sleeps.